Institutional investors own less than one percent of single-family homes, and their impact on prices is modest. New evidence suggests their presence may reduce rents.
The White House announced last week that it is “taking steps” to ban large institutional investors from buying single-family homes. It’s unclear whether the President has legal authority to do this without action from Congress. But setting aside that issue, let’s investigate the merits of the policy.
Many commentators have pointed out that institutional investors have such a small presence in the single-family market that it is implausible to attribute much of the recent appreciation in house prices to their activities. Institutional investors, defined as those owning 100 or more homes in their portfolios, own less than 1 percent of the single-family housing stock nationally and only about three percent of single-family homes for rent. Their purchasing activities have declined since 2022, but even at the peak the largest (1000+ homes) investors accounted for under three percent of single-family house purchases nationally. Institutional investors matter more in some markets than in others, but in no metro area do companies with 100+ home portfolios own more than five percent of the single-family stock. Figure 1 shows the large investor ownership share by state. All the states in blue – the large majority of them – have a large investor share less than one percent of single-family stock.
If we zoom out to the largest 50 metro areas, the same correlation holds, though a bit more weakly. Places with more large institutional investor ownership of single-family homes saw larger price declines over the most recently available 12-month period (Figure 3).
...read more at thedailyeconomy.org
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100 seems like a strange cutoff. It’s not like any ordinary person is buying 99 homes.
Also demonstrates dishonesty from a publisher that labels itself "economic research", it's no secret that LLCs and shell corps are used to isolate risk across larger portfolios.
Less than 1% of homes are on the market at any given time, so at 1% market ownership that private equity could choke liquid supply
TDS, the executive branch sword that financial institutions built to defend their monopolies cuts both ways. Live by the state, die by the state.
Not knowable, ownership is responsive
Private equity front-runs where industry (and thus workers) are moving to, not from. Only logical they'd buy up housing stock in an area where they're also planning large factories.
They intentionally buy falling knives where the downside is largely priced-in.
Private Equity is irrelevant in housing prices, this is pure populism.
Housing prices are low because supply is low due to building being illegal and over regulated.
The amount of mental gymnastics in this debate solely to deny simple economics is insane.
How many though I wonder are just sub companies buying chunks of homes and then they all are owned by one big player.